Exercise 19-18 EPS; shares issued; stock options [LO19-4, 19-5, 19-6, 19-7, 19-8, 19-9] Stanley Department Stores reported net income of $720,000 for the year ended December 31, 2013. Additional Inf

Exercise 19-18 EPS; shares issued; stock options [LO19-4, 19-5, 19-6, 19-7, 19-8, 19-9]

Stanley Department Stores reported net income of $720,000 for the year ended December 31, 2013.

Additional Information:

Common shares outstanding at Jan. 1, 2013 80,000

Incentive stock options (vested in 2012) outstanding throughout 2013 24,000

(Each option is exercisable for one common share at an exercise price of $37.50)

During the year, the market price of Stanley’s common stock averaged $45 per share.

On Aug. 30 Stanley sold 15,000 common shares.

Stanley’s only debt consisted of $50,000 of 10% short term bank notes.

The company’s income tax rate is 40%.

Required:

Compute Stanley’s basic and diluted earnings per share for the year ended December 31, 2013. (Round your answers to 2 decimal places.)

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